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Companies that Promote Women Make More Profits

 by Bennett Gordon


Tags: Science, research, women, glass cieling, ,

Promoting more women in the workplace isn’t just equitable, it’s profitable. Researchers have found that Fortune 500 companies that aggressively promote women to high levels consistently outperform their industry peers, Roy Douglas Adler writes for Miller-McCune. Adler and his colleagues at Pepperdine University used data from a study on the glass ceiling and found that the companies best at promoting women outperformed the industry median on various measures of profitability.

Adler stresses that the correlation between hiring women and profitability doesn’t show a causation, but he does come up with a possible explanation:

Firms exhibit higher profitability when their top executives make smart decisions. One of the smart decisions those executives have consistently made at successful Fortune 500 firms is to include women in the executive suite—so that regardless of gender, the best brains are available to continue making smart, and profitable, decisions.

Source: Miller-McCune 

faultroy_2
1/25/2010 11:54:21 PM

That is of course one possibility. The other possibility is that Fortune 500 companies have much larger market shares and can afford to be more politically correct. They usually have the cash flow to hire people based on more socially oriented concerns. They are extremely big ships and turn very slowly. They can afford to hire women in "key politically prominant seats," with no effect on sales, marketing or bottom line. This reminds of an article about the efforts of the Norwegian government requiring companies to hire women for Company Board positions based on their percentile of the population. All the companies were large publically traded companies that could afford to do so. This was politically motivated since the opposition to doing so was intense. If they did not do so, the companies would be very heavily fined. Mr. Adler's conclusions, while politically correct, are absurd. Women are able to be hired for less money on average than men. Furthermore, we would see a lot more women entrepeneurs than we do. It has been well documented that they work less hours, have more social responsibilities and opt out for childrearing. Another titillating faux study meant to generate attention but signifying nothing.